Archives October 2024

Are you planning to buy a semi-truck? Don’t do so until you have read our guidelines and recommendations.

Acquiring a semi-truck comes with a lot of considerations, particularly with financing. From getting the best loan terms to understanding which financing option works for you, nothing beats having a guide to walk you through.

Usually, our first piece of advice is never to buy a semi-truck outright even if you have the cash. Opting for semi-truck financing ensures that you maintain your cash flow for other business needs while you pay a comfortable sum monthly.

In this article, we cover everything you need to know about semi-truck financing so that you are well-informed.

FACTORS INFLUENCING SEMI-TRUCK FINANCING

Before getting into the details of how to get funding and what to do, let’s consider the basic factors that will qualify you for semi-truck financing.

CREDIT SCORE

Most lenders want to see a decent credit score before issuing a loan. For faster approval rates and favorable loan terms, you will need a FICO score of 640+ depending on your lender. Understanding how this impacts your financing process is important to help you stay prepared. Common factors that can affect your credit score include:

• debt levels
• credit utilization
• payment history

It is possible to get semi-truck financing with bad credit, but having an ideal FICO score guarantees you an optimum loan condition that does not add any strain to your finances.

BUSINESS HISTORY AND FINANCIAL HEALTH

Another factor that determines whether or not you will get a loan is your business history and cash flow. Businesses with over three years of experience stand a higher chance of getting a loan compared to new businesses. Also, note that loan providers will also consider your business’s revenue flow to ascertain if your business can service a loan.

DOWN PAYMENT

You need a down payment to get financing. This can range from 5% of the truck fee to 20%. The rate of the down payment is often determined by whether you meet the aforementioned conditions.

With excellent credit scores and strong financials, lenders tend to be lenient with how much they require as a down payment. Otherwise, a large down payment will make up for not meeting the conditions above.

TYPES OF SEMI-TRUCK FINANCING OPTIONS

Now that you know the conditions for getting semi-truck financing, let’s consider the options available to you. As a business owner, you want to ensure that you choose the best, as there is no one-size-fits-all financing.

The step to picking the right option often depends on assessing your unique business and financial needs which we will dive into in a bit. For now, let’s explore all financing options available.

TRADITIONAL BUSINESS LOANS

These are regular business loans you take for any business needs. The good thing is that you can also use a business loan to acquire a semi-truck. The process is straightforward and you can get one from banks or credit unions. After assessing your credit score and business history, they can give you a sum that will cover the cost of a semi-truck. They would also require down payment and collateral, which like other auto loans, is the vehicle.

EQUIPMENT LOANS

While traditional business loans are used to finance any aspect of your business, meet equipment financing, your loan option designed for business equipment. Equipment financing can be a great choice considering that it operates a loan structure tailored strictly for equipment acquisition.

Equipment loans are generally considered the most cost-effective. Plus, you can enjoy more flexible requirements on credit score, revenue, and time in business.

EQUIPMENT LEASING

Semi-truck leasing is a financing structure that requires you to remit an amount monthly for the period you use the truck. One of the advantages is that you pay a lower amount monthly compared to other options and you can replace the truck with a better model as you see fit.

Semi-truck leasing does not require a down payment, and the only amount you will pay is the initial payment, which covers your first-month payment.

On the other, the lease agreement does not provide a system where you own the truck at the end of the lease term. That means you keep paying for the truck as long as you’re using it.

BUSINESS LINE CREDIT

A business line of credit is a credit system that allows you to access funds on an as-needed basis. It works best for short-term loans and can be used to pay for your down payments and other expenses like repairs.

ALTERNATIVE FINANCING OPTIONS

If you do not qualify for traditional bank loans, due to lower credit scores or limited business history, alternative financing options can to save the day. Online alternative lenders provide flexible funding solutions such as quicker approvals and and more adaptable terms, compared to bank. They can also be attractive to newer businesses or those with credit challenges.

STEPS TO SELECT THE RIGHT SEMI-TRUCK FOR FINANCING

It is clear that you must assess different financing options. So before you find a loan provider, consider these situations as they will give you an idea of the best option that works for you.

NEW VS. USED TRUCKS

The first step to getting the right semi-truck financing knowing the truck you want to finance. The decision to either get a new or used truck is solely up to you, but note that loan conditions for both vary.

On the one hand, new trucks may be expensive, but they will require fewer repairs. Because they are more expensive, you should expect to make higher monthly payments. On the other hand, used trucks are less expensive and thus have lower monthly payments.

VEHICLE HISTORY CHECKS

New trucks do not need vehicle history checks, but used ones do. Check vital reports like accident and repair records, maintenance logs, and mileage verification among others.

Aside from needing them during the loan process, these checks would help you avoid any hidden issues that could lead to costly repairs and unexpected downtimes.

BUDGET CONSIDERATIONS

Budget considerations are why financing a semi-truck is a better option compared to outright purchase. When planning for financing, you should also consider a financing plan that allows for other future expenses like repairs.

HOW TO APPLY FOR SEMI-TRUCK FINANCING

After selecting your preferred financing options, it is time to get to business, that is, apply for semi-truck financing. Processes are almost similar across board so this section will give an overview of what to expect as you start to apply.

PREPARE FOR DOCUMENTATION

The documents you need to submit can vary from lender to lender and on the financing option you are opting for. However, you can prepare the following documents as they will come in and handy and make you prepared.

• Business balance sheet
• Business and personal tax returns for two years
• Bank statements
• Copy of CDL
• Vehicle documents like condition report,  motor carrier number, documents specifying serial number, model, photos, and more.

APPLY FOR FUNDING

Once you have your documents ready and you have selected your financing option, go ahead and submit your application. The application process will include stages like the prequalification where the lender reviews essentials like credit score, revenue and business history. Here, you get an idea of the loan amount and terms you may qualify for.

GET FUNDED

After prequalification and document submission, finalize the application by reviewing the loan terms including the interest rate, loan amount, repayment schedule, and any associated fees.

If satisfied, proceed to sign the loan agreement to finalize your financing. Ensure that you fully understand the terms to avoid unexpected costs later.

MAKING THE BEST SEMI-TRUCK FINANCING DECISION WITH INSPIRED FUNDING

Getting the best semi-truck financing is a combination of strategies including research, preparing required documents, and understanding what your business needs. Once you have got these out of the way, then you can begin applying and ultimately, get funded.

At Inspired Funding, we specialize in helping businesses, both old and new to acquire the necessary equipment including semi-truck. We offer a financial plan tailored to every business’s unique situation. Credit score and business history do not have to stand in the way of getting the semi-truck you need. We’ll help you find the best semi-truck financing so that you can focus on other aspects of your business.

Start your journey today.

Dump trucks are essential equipment in the transportation and construction industries, but they are expensive. It is almost impossible to acquire this machinery without affecting your cash flow. There are some expenses that come with buying a dump truck such as maintenance and insurance fees. So if you think of it, it is not a smart move to pay for one even if you can afford it. 

The good thing is you can try dump truck financing. It is quite simple: get the dump truck and pay for it over time. While this sounds simple, lenders may have strict criteria that may make the whole process tedious. With Inspired Funding, you can get funded in no time and get the best payment conditions.

New to truck financing? This article provides everything you need to know and how to get started.

HOW TO FINANCE DUMP TRUCKS

Financing is a great way to pay for a dump truck without going bankrupt. There are many alternatives, and we explain them all in this section. 

TRUCK LOANS

You can always use truck loans to finance your dump truck. It works the same way with every other loan: the lender provides you with funds and you repay over an agreed-upon period with interest. While this sounds easy,  remember that dump trucks are expensive. The lender has to be sure that you can pay back the loan and will need to see your credit score to ascertain that. Most lenders will require a decent FICO score, usually ranging from 640 and above. 

In cases where you don’t have the required credit score, then having over 3 years in business with an ideal cash flow can save the day. These are the basic things you should know about dump truck loans:

• The dump truck serves as collateral.
• A good credit score and financial history will give you a good chance.
• Loan terms vary depending on the lender.

LEASING

Businesses opt for dump truck leasing for short-term projects, which can span from 2-5 years. It’s like rent, but often lasts longer than a rental agreement. To get a lease, you make a down payment, then pay a sum with interest monthly over the lease period. 

At the end of the lease, you can return the truck, renew the lease or opt for a lease-to-own option. Here are some benefits of a dump truck lease:  

• No minimum FICO-score
• Lower monthly payment compared to the loan option.
• Flexible payment structure. 

EQUIPMENT FINANCING AGREEMENTS

Equipment financing agreements (EFA) are short-term loans designed for financing equipment. It comes with a couple of benefits and can be a smart move if you want to keep your business in motion without worrying about money. 

A major advantage of this loan type is the ability to preserve your working capital while you spread the payment over time. Other benefits of EFAs include:

• Flexible repayment terms 
• Tax benefits, as loans are deducted as expenses
• You own the truck after you pay off the loan. 
• The truck serves as collateral

SPECIALTY LENDERS 

There are also specialty lenders that concentrate primarily on financing different types of trucks. They have a deep understanding of the truck industry and can provide customized options for different truck buyers like we do at Inspired Funding. Credit score is not a barrier, instead, we provide a seamless process, assisting all the way. 

Once you have completed the application and reviewed the funding approval with our finance, you can go ahead to submit the necessary documents and get funded.  

REQUIREMENTS FOR GETTING A DUMP TRUCK FINANCING

There are basic things a lender will look out for before financing a dump truck. These are your credit score, how long you’ve been in business, and down payment. Let’s break these down so you can understand:

CREDIT SCORE

The best way a lender can be assured you will repay your debt is by confirming you have a good credit score. We usually recommend having a score of at least 640 to get great interest rates and repayment plans. Anything lower than that result in unfavorable loan conditions.

TIME IN BUSINESS

How long you have been in business is also a factor that most lenders consider. People with three years of experience in business will stand a good chance. But this doesn’t mean new business will be pushed aside. A good credit score can make up for your lack of business history.

DOWN PAYMENT

Lenders will demand a down payment. Some can ask for a reasonable percentage, while others can ask for as high as 50%. This is often dependent on whether you met the requirements above.

HOW TO GET DUMP TRUCK FINANCING

People get approved for dump trucks every day. It is all a matter of planning and knowing the right steps to take. Here are some processes you should consider:

ASSESS YOUR FINANCIAL HEALTH

Your first step should be to review your credit score and financials before applying. A strong financial profile will give you a higher chance of getting approved for better loan terms.

RESEARCH FINANCING OPTIONS

Good research ensures that you choose the best financing that works for your situation. So make sure you invest some time into it. 

PREPARE YOUR DOCUMENTATION

Once you have found the right financing options, compile your necessary documents, start preparing your documents. Some of the documents you need to provide include:

• Truck details like its price 
• Financial and business record
• Annual mileage on the truck, among others

APPLY FOR THE DUMP TRUCK FINANCING

After your research. It is time to apply! Whether you are choosing banks, online lenders or truck loan financiers, begin the application process and submit the necessary documents already listed above. Seek help when necessary with the applications and read every document carefully before signing.

GET FUNDED

To get funded, you will go through some stages such as the determination which sets out the loan conditions like the interests, repayment period, and others. Once this is done, you can finalize your paperwork and get funded!

GETTING DUMP TRUCK FINANCING WITH BAD CREDIT

Having bad credit does not mean the end of the road for you. You can still get dump truck financing. Typically, lenders will want a high down payment. You can improve your chances of getting dump truck financing with the following:

• Co-signer with good credit
• Lengthy-time in business
• Good cash flow

These are not set in stone and conditions may vary for every lender. 

BENEFITS OF DUMP TRUCK FINANCING WITH INSPIRED FUNDING

Dump truck financing allows you to acquire a vehicle while preserving your cash flow. With the right financing partner, you can expand your fleet and grow multiple streams of revenue. 

Inspired Funding has helped hundreds of businesses get the best dump truck financing. We guide you to finding the right truck and help you with the application process from start to finish. 

Also, enjoy benefits like low down payments on used dump trucks and no minimum FICO score on leased trucks. Give us a call today to start your dump truck financing journey.

Commercial drivers are bringing home bigger paychecks than they have in years. The figures don’t lie. In 2024, the average truck driver salary per annum is $92,255 in the U.S. So, if you are considering breaking into the transport business, commercial truck business is an attractive option.

However, starting out doesn’t seem easy. And unless you have a lot of money stashed away already, you will need commercial truck financing. Getting this loan comes with a few requirements like a good credit score and high down payment when being accepted. But with the right guide, getting through the process becomes much simpler.

In this article, we will cover everything you need to know about commercial truck financing.

WHAT IS COMMERCIAL TRUCK FINANCING?

Commercial truck financing is the type of loan you get when you want to purchase a truck or any heavy vehicle for commercial purposes. It is unlike standard auto loans that cater to personal vehicles. It is designed for larger and more expensive trucks, from semi-trucks and dump trucks to other types used for business.  Comparatively, the loan structure of commercial trucks is different from conventional auto loans. 

Before you getting  a loan, here are a couple of facts you should know about commercial truck financing: 

• lenders look at your creditworthiness and revenue. Financiers would prefer a credit score of about 600 or more
• the truck serves as collateral 
• there are multiple financing options ranging from banks, truck dealer financing along others

In a nutshell, you need strong financials and a higher credit score to get favorable loan terms.

FINANCING VS. LEASING

You can either choose to finance a commercial truck or go for leasing. The one you go for primarily depends on your business needs. If you are looking at upgrading your trucks to new models later, then you should consider getting a lease on your truck. However, note that leasing comes with usage limits and you will not be able to customize the truck as you would if you were financing it. 

With financing, you get full ownership once you pay off your loans. This is a great option if you plan to use the truck long-term.

CHALLENGES IN SECURING COMMERCIAL TRUCK FINANCING

A couple of factors can also pose barriers when securing your commercial truck financing. These factors can slow down the loan approval process, or result in a loan structure that does not favor the borrower. Some of these include:

POOR CREDIT HISTORY

Limited credit history can make securing financing tough. The outcomes are either higher interest rates or even outright denial because it sends a risk signal to the lender. 

Solution? Try raising your credit score before applying. Pay off old debts and avoid getting new ones. Another option is to consider bad credit truck financing although the terms might be stricter.

HIGH DOWN PAYMENT

To reduce their risks, lenders often ask for a large upfront payment. This can help lower the overall loan and increase the chances of approval. It may be overwhelming for small businesses or startups. The best strategy? Look for low down payment truck financing options to ease the initial financial burden.

STRICT LOAN TERMS FOR NEW BUSINESSES

Lenders tend to propose stricter loan terms for borrowers that are just starting the business with no financial history or proven revenue. You can make this less of a hurdle by having additional sources of income.

UNDERSTANDING THE DIFFERENCES BETWEEN LOAN OPTIONS

A general piece of advice for those just starting is to familiarize yourself with the range of loan types available. Choose the best loan type by doing your research or consulting a financial advisor.

HOW TO GET THE BEST COMMERCIAL TRUCK LOAN

Getting a favorable commercial truck loan is easy when you follow the right step. The following can help you improve your chances of finding financing that meets your business needs:

ASSESS YOUR BUSINESS FINANCES

Start by reviewing your finances before seeking financing. This will help you identify the best loan option. It also gives you an opportunity to make necessary adjustments before approaching your lender.

RESEARCH LOAN OPTIONS

Once you have a grasp of your financial health, start researching various loan options. Research commercial truck financing companies, banks, and truck dealer financing. Ensure you keep an eye out for the best commercial truck loans that offer competitive rates and favorable conditions.

PREPARE REQUIRED DOCUMENTATION

Common documents include business plans, tax returns, and profit and loss statements. Having these documents ready can streamline the application process and boost your chances of approval.

EXPLORE FLEXIBLE FINANCING OPTIONS

There are different financing structures out there, so take the time to explore which one best aligns with your business needs Common options include leasing versus buying, bad credit financing, and low down payment alternatives. 

NEGOTIATE TERMS

What’s a good loan agreement without proper negotiation? Rely on knowledge from earlier points to secure a loan that works in your favor. When you negotiate, focus on key areas like down payment, interest rates, and loan duration.

CONCLUSION

Commercial truck financing is vital if you are looking to scale your operations and remain competitive. With financing, you can expand your fleet by adding more trucks without going bankrupt.

As we have covered in this article, ensure you explore alternatives that align with your business needs and avoid jumping at every available offer. 

Scaling your business is important, and so is getting the right financing that allows you run commercial truck businesses without the worry of unfavorable loan conditions or accumulating bad debts.

WHY CHOOSE INSPIRED FUNDING FOR YOUR COMMERCIAL TRUCK FINANCING NEEDS

Inspired Funding offers customized commercial truck financing solutions to businesses of any size, from first-time buyers seeking one unit, to fleet upgrades for growing enterprises. Inspired Funding makes the financing process an easy one for business owners; we offer flexible terms, quick approvals and have programs designed around credit issues.

Schedule a call today to explore your financing options with a truck financing expert at Inspired Funding!